TOKYO RECEIVES MIXED RATINGS FOR REAL ESTATE INVESTMENT AND DEVELOPMENT NEXT YEAR, SAYS EMERGING TRENDS IN REAL ESTATE® ASIA PACIFIC 2011
Forecast from ULI, PwC is Promising for Asia Pacific Overall
TOKYO (December 2, 2010) – Tokyo has fair prospects for real estate investment and development opportunities in 2011, according to Emerging Trends in Real Estate® Asia Pacific 2011, a real estate forecast jointly published by the Urban Land Institute (ULI) and PricewaterhouseCoopers LLP (PwC).
Despite some investor reticence about Tokyo and Japan in general, Emerging Trends is optimistic about the overall prospects for the Asia Pacific real estate industry, saying the “cloud has been lifted” from Asia Pacific markets, with the fiscal outlook for most of the Asian countries more promising than that for Europe or the United States. The report, released today in Tokyo, was presented in detail at a dinner of industry leaders by Steven Blank, senior fellow of real estate finance at ULI.
According to the report, “Many, if not most, Asian economies have rebounded to pre-crisis levels, and real estate markets, although mostly slower, are headed toward some semblance of normalcy...The distress that was so widely predicted a year ago for most of the region’s largest markets has by and large failed to materialize.”
Adds Hiroshi Takagi, PwC Japan Tax Partner, “While some believe that Tokyo might not offer investors the same short-term returns of other markets, Tokyo continues to be the region’s largest real estate market. As a result of its market size and liquidity, investors continue to look for opportunities and we expect Tokyo to receive sizeable allocations from global investors with an Asian investment strategy”.
Emerging Trends provides an outlook on Asia Pacific real estate investment and development trends, real estate finance and capital markets, and trends by property sector and metropolitan area. It is based on interviews and a survey of more than 280 internationally renowned real estate professionals, including investors, developers, property company representatives, lenders, brokers and consultants.
Japan’s struggling economy has affected Tokyo’s ratings in the survey, with the city slipping from seventh place for investment prospects in 2010 to 12th place in 2011. Still, the report points to several reasons for optimism regarding Tokyo: 1) an abundance of capital for deals because of extremely low interest rates; 2) increased interest from foreign investors; and 3) a series of Japanese real estate investment trust public offerings. Investors continue to search for opportunities in Tokyo, the report says, because “the bottom has been reached here, whereas the regional assets could still decline a bit.” While survey participants recommended holding most property types in Tokyo, rather than buying or selling, office space was singled out as an attractive property type to buy in the city.
Emerging Trends rates Singapore, Shanghai, Mumbai, Hong Kong and New Delhi as the top five investment markets for next year:
On the whole, survey participants regard Asia as the part of the world that is showing the most growth, in terms of the real estate industry. “The area’s economic expansion should be the key driver to help propel commercial real estate investments and developments across the region,” Emerging Trends says. “The real estate market is back, fund raising is strong in Asia, local banks are providing financing, and capital is everywhere.”
The report is the fifth Asia Pacific edition of the highly regarded Emerging Trends in Real Estate® annual investor survey.
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The Urban Land Institute (www.uli.org) is a global nonprofit education and research institute supported by its members. Its mission is to provide leadership in the responsible use of land and in creating and sustaining thriving communities worldwide. Established in 1936, the Institute has nearly 34,000 members representing all aspects of land use and development disciplines.
PwC firms provide industry-focused assurance, tax and advisory services to enhance value for their clients. More than 161,000 people in 154 countries in firms across the PwC network share their thinking, experience and solutions to develop fresh perspectives and practical advice. See www.pwc.com for more information.
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